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2 AVhite V. Proctor, 4 Taunt. 209 ; Haluptzok V. Great Northern Ry.,

55 Minn. 446.

8 De Bu.'^sche v. Alt, 8 Ch. Div. 286; Laussatt v. Lippincott, 6 S. & R.

(Pa.) 386; Harralson v. Stein, 50 Ala. 347; Arff v. Star Fire Ins. Co.,

125 X. Y. 57; Carpenter V. Gernmn Am. Ins. Co., 135 n. Y. 298.

* A nle, В§ .50.

В» De Bussche v. Alt, 8 Ch. Div. 286, 310.

OBLIGATIONS OF AGENT. 119

contract between the principal and such sub-agent. Under

the first view the agent alone is responsible to the principal,

and the sub-agent is responsible to the agent. ^ Under the

second view, the first agent discharges his obligation as soon

as he appoints a suitable second agent, and the latter is

responsible directly to the principal, or, in other words, the

first agent is merely an agent to make contracts of employ-

ment for his principal.^

The problem is well illustrated in cases where A deposits

in his home bank for collection commercial paper payable at

a distance. In such a case A knows that the home bank

must send it to a correspondent bank at the place where it is

payable. The problem is whether A, under these circum-

stances, simply authorizes the home bank to make use of a

sub-agent in the collection of the paper, or whether he author-

izes the home bank to employ an additional agent in his be-

half. If the first, then the home bank is liable for the

manner in which the sub-agent performs the duty, and the

sub-agent is liable to the home bank ; if the second, then

the correspondent bank is liable to the principal, and the

home bank is exonerated if it has used due care in the -selec-

tion of the additional agent. The courts differ widely in the

view taken of this situation. One class of cases holds that A

contracts for the skill and judgment of the home bank in the

collection of the paper, leaving the bank free to employ such

instrumentalities as it sees fit, but assuming himself no

responsibility for the conduct of the sub-agents.^ Another

class of cases holds that A under such circumstances con-

templates the appointment of a sub-agent, and impliedly

authorizes the home bank to make such an appointment in

his behalf ; that the obligation of the home bank is to use due

care in making such appointment ; and that there arise two

contracts, (1) the contract of the first bank with A to use due

1 New Zealand, &c. Co. v. Watson, L. R. 7 Q. B. D. 374.

2 De Bussche v. Alt, 8 Ch. Div. 286.

3 Exchange N. B. v. Third N. B., 112 U. S. 276; Simpson v. Waldby,

63 Mich. 439; Power v. First N. B., 6 JNIont. 251; Allen v. Merchants'

Bank, 22 Wend. (N. Y.) 215.

120 PRINCIPAL AND AGENT.

care in selecting a sub-agent, and ('2) the contract of the sec-

ond bank with A to use due care in the collection of the

paper. ^ On the first view there is no privity of contract

between A and the correspondent bank, while on the second

there is such privity. The same question arises in the case of

the appointment of a notary by the bank ;2 and in other like

cases.'^

It will be observed that the question in these cases is not

as to the power of the home bank to appoint a sub-agent, but

as to the power of the home bank to create a contract between

the principal and a third party. It is not the delegation of

power but the possession of power that is involved. And it

is believed that this is the question in every case whore it is

sought to establish a privity of contract between the principal

and a so-called sub-agent.^ Unhappily the courts are not

agreed upon the legal effect to be given to the same set of

circumstances, and therefore no definite rule can be laid down

as to when the exercise of the authority to act through sub-

agents does or does not create a privity between the principal

and such sub-agents.

В§ 96. Del credere agenta.

A del credere agent is one who, in consideration of an addi-

tional compensation, undertakes to guarantee the payment to

the principal of the debts arising and becoming due through

В» Guelich v. National State Bank, 5G Iowa, 434; Dorchester Bk. v.

New England Bk., 1 Cush. (Mass.) 177; Merchants' N. B. v. Goodman,

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